Frasers Logistics and Industrial Trust and Frasers Commercial Trust Announce Proposed Merger

Investors have already felt something fishy last Friday when both Frasers Commercial Trust and Frasers Logistics and Industrial Trust requested for a trading halt. Today, Frasers Logistics and Industrial Trust and Frasers Commercial Trust announced a proposed merger by way of trust scheme.

In conjuction with the merger, Frasers Logistics and Industrial Trust also proposed the acquisition of 50% interest in Farnborough Business Park from a wholly-owned subsidiary of Frasers Property Limited. The remaining 50% is currently held by Frasers Commercial Trust (Read more: My Personal Analysis Of Frasers Commercial Trust) After the merger, Frasers Logistics and Industrial Trust will hold 100% of Farnborough Business Park.

With the merger, the total assets will be worth approximately S$5.7 billion and the enlarged REIT will be one of the top 10 S-REIT by market capitalisation with index representation.

Frasers Commercial Trust unitholders will receive

  • S$0.151 in cash for each unit; and 
  • 1.233 new Frasers Logistics and Industrial Trust units at an issue price of S$1.240 per unit.

I shall not dive into other rationale that the manager gave for the proposed merger. As a dividend investor, I am only keen in the dividend yield after the merger. The merger is expected to be DPU accretive on a pro forma basis for both Frasers Logistics and Industrial Trust unitholders and Frasers Commercial Trust unitholders by 2.2% and 4.2% respectively.

After the news of the merger broke out, share price of Frasers Commercial Trust has also gone up by 2.40%.

Summary of November 2019 Transactions

In this month of November, I have made two stock transactions. The first is that I have subscribed to the rights offered by Mapletree Commercial Trust. I have applied for excess rights and gotten all the excess rights that I have applied for. This surprises me as based on past experiences, I never gotten any excess rights that I have tried to apply for. This is also given Mapletree Commercial Trust is such a popular REIT. With the addition of new units, you can see that Mapletree Commercial Trust now occupies 11% of my stock portfolio in terms of invested value.

You probably might be wondering which is the second stock transaction that I have made. I have purchased Frasers Commercial Trust at S$1.61. Based on the price of S$1.61, the current dividend yield is 5.57%. This is much more than the current month’s issue of the Singapore Savings Bonds whereby the interest rate has fell to a level beyond my interest. I have skipped this month’s purchase of Singapore Savings Bonds and placed my monies with Frasers Commercial Trust since the yield is much higher.

Moving ahead, I probably will refrain from purchasing Singapore Savings Bonds should the yield worsen. I shall look for pockets of opportunities in the current stock market in terms of dividend yield to make regular purchases.

One of the best features that I liked about Stocks Café is the report function whereby I can see the dividends that I have collected based on the stocks that I held in my stock portfolio. Since most of the dividends are in, I shall be sharing with you whether I have met my goal of 11K passive income next month.

Cheers!

Screening For Dividend Stocks In November 2019

How do I find stocks to analyse and decide if it is worth investing? Every month, I will always start by running the stock screener that I have saved on Stocks Café. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Below are the top 10 dividend yielding stocks as of 14th November 2019.

Name Current Yield % P/E P/B Market Cap
OUE 8.904 19.94 0.33 1.3B
Haw Par 8.765 16.29 0.969 3B
CapitaRetail China Trust 7.316 9.57 0.987 1.8B
Cromwell REIT SGD 7.183 10.96 0.931 1.9B
Cromwell REIT EUR 7.098 11.45 0.966 1.3B
Mapletree NAC Trust 6.757 6.05 0.853 3.9B
Mapletree Industrial Trust 6.076 16.93 1.58 5.4B
Frasers Commercial Trust 5.963 9.77 0.982 1.5B
Yanlord Land 5.714 4.83 0.473 2.4B
Frasers Logistics and Industrial Trust 5.691 11.86 1.271 2.7B

With the ongoing protests in Hong Kong, this has impacted REITs that have Hong Kong assets in its portfolio. Protesters are vandalising malls and this causes shoppers to stay at home, forcing shopping malls and shops to shut their doors.

One such example is Mapletree North Asia Commercial Trust which has Festival Walk as one of its assets.

Mapletree North Asia Commercial Trust is a real estate investment trust, which invests directly or indirectly in a diversified portfolio of income-producing real estate in Hong Kong SAR, China and Japan. It focuses on commercial assets as well as real estate-related assets. Its objective is to achieve an attractive level of return from rental income and long-term capital growth. The company was founded in February 2013 and is headquartered in Singapore.

When the share price fall, the current dividend yield increases. Further analysis is required to check the fundamentals of Mapletree North Asia Commercial Trust if it is still able to sustain its historical dividend payout.

Opportunity?